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“It will lead to a substantial reduction in North Tyneside’s carbon footprint.

“But perhaps most importantly, it means that in tough financial times we’re providing extra support for our tenants by enabling them to reduce their fuel bills.

“I’m fully aware that not all tenants will be able to take advantage of the scheme. That’s why I’m ensuring the council’s income will go towards a Green Fund, which will enable other tenants to benefit from energy efficiency measures.”

Thomas Buss, Head of Microgeneration at E.ON, said: “We’ve all got a role to play in bringing down our carbon footprint and becoming more energy fit.

“I’m delighted that we’re able to work with North Tyneside Council and together we can start to make a difference and build energy efficient into our everyday lives.

“Schemes like this will not only give people a more renewable source of power, they’ll also provide a source of free energy – it’s like your housing is working for you.”

E.ON will also install In-Home Displays in 100 homes as part of a pilot scheme, which will provide tenants with visual information on their energy consumption. This is a step towards helping tenants understand and change their energy usage, reduce bills and carbon emissions.

North Tyneside Council’s housing service, North Tyneside Homes, manages around 15,800 council homes across the borough.

The council has appointed E.ON to provide, install and maintain solar panels for around 3,000 of the houses and 100 public buildings for 25 years at no cost to the local authority.

E.ON’s costs will be covered by Government reward payments for renewable energy over 25 years.

The Government incentive feed in tariff is only available to installers up until March 31, 2012 so only a limited amount of time is available to carry out the installations. Solar Panels can only be fitted to certain properties that have a southerly facing aspect with little or no shading and which are structurally suitable.

The installation work, which will be carried out on E.ON’s behalf by Kier North Tyneside, is planned to start in September and will be completed by March, 2012.

Kier North Tyneside regional director, Mike Furze, said: “Renewable energy is ever becoming more important as fossil fuels run out and people look for alternative ways of heating and lighting their homes.

“By providing the people of North Tyneside with a cost effect way of installing environmentally friendly technology in their homes we hope, along with our partners North Tyneside Council and E.ON, to be able to make a positive contribution to the people who live in the communities in which we work”.

It is estimated that tenants will save between £70 and £120 a year1 by making use of the free daytime electricity generated by the panels.

Meanwhile, the council will receive revenue over the course of the project for effectively renting out the roof space.

It will use this money to set up a Green Fund which will be targeted towards energy efficiency measures for those tenants who don’t directly benefit.

Around 100 of the council’s public buildings, such as leisure and community centres, will also be fitted with solar panels, which will reduce these buildings’ energy costs.

1 Based on the installation of a 1.88kW to 2.35kW solar photovoltaic system fitted to a south-facing roof exposed to average UK weather conditions on an assumed tariff rate of 13.3p/kWh. Age UK (Stay Warm) customers will remain on the fixed tariff.